Economists win Nobel for work on climate and growth

Image caption William Nordhaus’s research has been to used to examine the consequences of climate policy interventions

This year’s Nobel prize for economics has been awarded to William Nordhaus and Paul Romer for their work on sustainable growth.

The US economists’ research focuses on how climate change and technology have affected the economy.

The Royal Swedish Academy of Sciences said they had addressed “some of our time’s most… pressing questions” on how to achieve sustainable growth.

The duo will receive nine million Swedish krona (£841,000).

Prof Nordhaus, of Yale University, was the first person to create a model that described the interplay between the economy and the climate, the academy said.

Prof Romer, of New York University’s Stern School of Business, has shown how economic forces govern the willingness of firms to produce new ideas and innovations.

“Their findings have significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature and knowledge,” the academy said in statement.

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Image caption Paul Romer stepped down this year as the World Bank’s chief economist

Prof Romer courted controversy earlier this year when he stepped down as the World Bank’s chief economist after just 15 months in the job.

He had claimed that Chile’s rankings in a closely watched “Doing Business” report may have been manipulated for political reasons under socialist president Michelle Bachelet.

It came amid reports that the outspoken economist had clashed with colleagues at the Word Bank over a host of issues, including the organisation’s culture and economists’ use of grammar.

Commenting on the prize, Prof Romer told reporters: “I think… many people think that protecting he environment will be so costly and so hard that they just want to ignore [this].

“[But] we can absolutely make substantial progress protecting the environment and do it without giving up the chance to sustain growth.”

American domination

The Nobel economics prize – technically known as the Sveriges Riksbank Prize – was created by the Swedish central bank “in memory of Alfred Nobel” and first awarded in 1969.

That is unlike the other prizes which were created in the philanthropist’s last will and testament, and first awarded in 1901.

Last year, US economist Richard Thaler, author of the best seller Nudge, won for his work in behavioural economics.

In 2016 it went to British-born American economist Oliver Hart and Finn Bengt Holmstrom for their work on “contract theory” – the study of how people develop legal agreements in situations with uncertain conditions.

Since it was first awarded in 1969, Americans have dominated the awards. Only one woman has won the economics prize since 1969, Elinor Ostrom in 2009.

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